Plastic tax: What is the situation in the EU member states?

There is currently no EU plastic tax that is binding for all countries. The situation is different within the individual EU member states: Some states have enacted a plastic tax. As a result, all companies that place single-use plastic packaging on the market in countries with a plastic tax must pay levies to these states. The fact that each EU member state and countries outside the EU have their own regulations makes it difficult for companies to ensure their environmental compliance with regard to the plastic tax.

In January 2024, the German government confirmed that the introduction of the plastic tax in Germany is planned for 1 January 2025. The EU plastic tax affects all companies that sell single-use plastic products or packaging. They will be given a one-year lead time to adapt their packaging strategies and replace non-reusable plastics with more sustainable alternatives.

Find out in this article what exactly the plastic tax is all about, what the benefits are and how much it will cost. We will also tell you in which countries the plastic tax already exists and whether it is likely to be introduced in Germany. We at Deutsche Recycling GmbH have made it our goal to prepare companies for impending changes in the area of environmental compliance – such as the plastic tax in this case – and to actively support them with the bureaucratic challenges.

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On 1 January 2021, the EU made it mandatory for all member states to pay a levy if they do not recycle their plastic packaging waste. Some countries have so far financed the levies from their budgets – including the German government. However, there are countries that have imposed a plastic tax in order to refinance the levies to the EU through the revenue from this tax. In these countries, the private sector is the addressee of the plastic tax. It is to be expected that more and more countries will enact a plastic tax in the future. This will also be the case with the plastic tax in Germany from 2026.

Levy on Non-Recycled Plastic Waste, Not an EU Plastic Tax

In 2021, the EU adopted a multiannual financial framework that includes new sources of revenue to help pay off debts from the COVID-19 relief packages. One of these sources is a levy on plastic waste: 80 cents per kilogram of non-recycled plastic packaging waste.

This plastic levy has been in effect across all EU member states since January 2021. In Germany, the levy costs approximately 1.3 billion euros annually, but until now, it has not been passed on to businesses or consumers. This will change with the introduction of a plastic tax. In the 2024 federal budget debate, the German government decided to implement the plastic tax, shifting the burden to companies and citizens.

Revenue from the EU plastic levy is allocated to the European Union’s budget, playing a key role in funding the European Green Deal. This initiative promotes a sustainable circular economy and aims to reduce the environmental impact of plastic.

When does the plastic tax apply?

In principle, the plastic tax is not a tax, but a method of calculating the member states’ contributions to the EU budget. As it is not an EU plastic tax, it does not necessarily have to be passed on to the private sector. The individual member states have the freedom to organise the exact implementation of this tax at national level.

As a result, the majority of EU member states finance the levies for non-recycled plastic waste from their own tax revenues instead of passing them on to the packaging industry in the form of a national tax on plastic.

The problem with paying from their own tax revenues is that companies are not incentivised to use less or no plastic or to produce more packaging from recycled plastic. The logic is obvious: why should we recycle more and thus accept higher costs if the states pay the taxes for plastic waste?

Some countries have recognised the problem and introduced a plastic tax. This makes things complicated for you as a manufacturer or distributor of packaging made from non-recycled plastic. If you place plastic packaging on the market in the countries concerned, you will actually have to pay tax.

The German government has announced that the plastic tax will be introduced on January 1, 2025, according to its recent communication on the 2024 supplementary budget. The final design of the tax is still being finalized.

The plastic tax aims to:

• Encourage companies to revise their packaging strategies
• Promote the use of biodegradable materials
• Indirectly support recycling and reusability through deposit systems
• Alleviate the financial burden on the federal budget

Which Products Are Affected by the Plastic Tax in Germany?

The EU plastic tax primarily targets hard-to-recycle plastic packaging and single-use items like food containers, beverage cups, and lightweight plastic bags. While the implementation of the tax varies across EU countries, the core objectives remain consistent. In Germany, passing the tax on to businesses and consumers, particularly in retail, could lead to price increases.

Under the Single-Use Plastics Fund Act (EWKFondsG), all companies that manufacture, fill, sell, or import such products are required to comply with the tax.

• Registration Requirement: Affected companies must register by 2024 through the Central Packaging Register (ZSVR) platform or the DIVID platform of the Federal Environment Agency.
• Target Group: This applies to all entities that bring single-use plastic products into the German market.

What Challenges Will Companies Face with the Plastic Tax?

The upcoming introduction of the plastic tax is expected to increase costs for manufacturers and importers of plastic products, as they will likely pass the tax burden on to consumers. Additionally, companies will need to adjust their production processes to remain competitive. There will also be increased administrative demands, as accurately declaring the plastic content in products will be crucial to avoid fines and seizures. This applies to both online retailers and physical stores selling plastic products.

Companies should closely monitor developments related to the plastic tax and assess its impact on their business. It is advisable to review current packaging materials, explore alternative suppliers, and transition to sustainable packaging options, such as recyclable or biodegradable materials, as well as deposit systems.

In Which Countries Is a Plastic Tax Imposed?

Plastic taxes have been introduced primarily in southern EU countries. However, in countries like Austria, France, and Germany, there is currently no plastic tax, meaning the governments themselves cover the contributions to the EU.

In Germany, a significant portion of tax revenue is allocated to these payments, as Germany leads in non-recycled plastic waste, with 1.7 million tons of packaging waste annually. In 2021 and 2022, Germany paid €1.4 billion each year as its plastic levy to the EU. For comparison, during the same period, the EU’s total revenue from the plastic levy was €5.8 billion.

Germany has already taken steps to address this negative statistic, such as introducing a reuse obligation for 2023. Although there is no current legislation for a plastic tax in Germany, plans are underway. Other southern EU countries provide examples of how a national plastic tax could be introduced and structured:

• In Spain, since January 1, 2023, non-recyclable plastic packaging is taxed at 45 cents per kilogram. Manufacturers and importers must pay this tax if they produce or import more than 5 kilograms of single-use plastic packaging per month.
• In Portugal, a tax on single-use plastic packaging has been in effect since January 1, 2022, and must be paid by packaging industry companies. Additionally, from September 1, 2023, a tax on aluminum packaging will be introduced. In Portugal, manufacturers and importers are responsible for paying the plastic tax, but the costs are typically passed on to consumers through higher prices.
• Italy planned to introduce a plastic tax at the beginning of 2023, but the plans were delayed. Starting January 1, 2024, Italian manufacturers must pay a tax on single-use plastic products. If these products are imported from other EU countries, the foreign distributor typically becomes liable for the tax.

Other EU countries are also preparing to introduce national plastic taxes on non-recycled plastic waste. It is unlikely that the EU will implement a unified plastic tax, so individual states are responsible for shifting the costs onto the packaging industry. More countries are developing or planning relevant legislation.

Plastic taxes are not limited to EU member states. For example, the United Kingdom introduced a plastic tax on April 1, 2022, applying to plastic packaging that does not contain at least 30% recycled plastic. Any company that manufactures or imports more than 10 tons of such packaging in the UK within a 12-month period is required to pay the plastic tax.

In Germany, there is currently no plastic tax, but new regulations for single-use plastic manufacturers and first distributors will take effect on January 1, 2024. These companies must contribute to the Single-Use Plastics Fund, managed by the Federal Environment Agency (UBA) through the DIVID platform. The plastic tax is expected to be officially introduced in Germany on January 1, 2025, according to the government’s current plans.

The Single-Use Plastics Fund covers the costs of disposing of single-use plastic waste in streets and parks. Manufacturers will pay a fee based on the type and amount of products they produce, and these funds will be distributed to cities, municipalities, and public organizations.

The Federal Environment Agency plays a central role in managing the Single-Use Plastics Fund. Starting in 2025, the UBA will set the levy amounts for individual manufacturers and ensure fair distribution of the funds to the appropriate organizations.

If your company manufactures or distributes single-use plastic products in Germany, it is subject to the Single-Use Plastics Fund Act and must register with the Federal Environment Agency.

Questions about plastic tax in Germany or abroad? We have the answers!

The examples of plastic tax in various countries show how complicated it is for internationally operating companies to take all laws into account and ensure proper environmental compliance. It is also unclear in future to what extent the legal situation will change in the individual countries and therefore also in Germany.

To ensure permanent environmental compliance, it is helpful to work with a partner with national and international experience. If you have any questions or specific concerns, please contact our experts at Deutsche Recycling GmbH!